Bayer to Cut 540 Jobs in California

May 27--Bayer HealthCare announced late Wednesday that it will
wind down its multiple sclerosis drug production in Emeryville,
resulting in the loss of about 540 jobs starting next year and the
vacating of more than 300,000 square feet of office space.

The move will result in the company's multiple sclerosis drug,
Betaseron, being moved to Germany. It eventually will be produced
entirely under contract by pharmaceutical giant Boehringer
Ingelheim, which currently makes the drug for overseas use. Bayer
HealthCare's sales of the drug topped $1.6 billion last year.

No workers will be laid off in 2011, but all layoffs will be
completed by 2013, said Joerg Heidrich, global head of biotech
product supply for Bayer HealthCare. Employees who stay on until
the transaction is complete will receive an undisclosed bonus,
executives said.

"We are really proud of the employees here in Emeryville and
what they've done," said Catherine Anderson, a spokeswoman for
Bayer HealthCare. "It has nothing to do with site performance, but
rather about Bayer trying to get greater flexibility in this
marketplace."

Multiple sclerosis drugs are part of an extremely competitive
market; players include Biogen, Pfizer, Merck, and Novartis.

"I'm not surprised at all, because at the end of the day, it's
about being as efficient as possible for these companies," said
John McCamant, editor of the Medical Technology Stockletter in
Berkeley. "We see moves like this all the time

as companies try to stay competitive."

Even though Bayer HealthCare is leaving Emeryville, it will
continue to have a strong presence in the Bay Area.

Its largest footprint is in Berkeley, where it has about 1,200
employees on a 43-acre campus. In 2009, Bayer announced that it was
putting more than $100 million to upgrade and improve its
manufacturing capabilities there. This campus is where its
hemophilia drug, Kogenate, is manufactured.

Bayer HealthCare also has about 70 employees at Mission Bay in
San Francisco, where its hematology research program is based.

Besides cost cuts, the move coincides with the end of a six-year
lease the company signed with multiple landlords, including
biopharmaceutical company Novartis and EmeryStation East in Sept.
2007. Most of the six buildings, including the headquarters at 5650
Hollis St., will be returned to Novartis. According to a statement
from Novartis, the company currently has no plans for the
buildings.

Bayer is Emeryville's third-largest employer. Based on 2010
employment, Pixar is first with 1,200 employees; Novartis is second
with 797.

"We think it's sad Bayer is closing and choosing to leave
Emeryville because they've been really active here in the
community," she said. "Hopefully as the economy recovers, it won't
be to hard to fill the space."

In total, about 1.5 million square feet of space in Emeryville
and Berkeley is devoted to life science use with about a 1 percent
vacancy rate.

Contact David Morrill at 925-977-8534.

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